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• Kalpataru Properties and Shangrila Infracon India are planning to raise a combined INR 2,600 crore through bond issuances targeted at private credit investors, according to sources.
• Kalpataru intends to raise INR 1,635 crore through four-year and nine-day bonds carrying an 8 per cent coupon, while Shangrila Infracon plans a maiden INR 950 crore issue with a three-year tenure.
• Private credit funds are expected to show strong interest in the transactions amid rising demand for structured real estate financing opportunities.
• GSS India Opportunities Alternate Investment Fund has reportedly committed to half of Kalpataru’s proposed issuance.
• The planned fundraises reflect increasing reliance on private credit capital as banks remain selective in lending to real estate companies.
Kalpataru Properties and Shangrila Infracon India are planning to collectively raise around INR 2,600 crore through bond issuances aimed at private credit investors, according to sources familiar with the matter. The proposed transactions highlight growing participation of private credit funds in India’s real estate financing market as traditional bank lending remains selective. Advertisement
Sources indicated that Kalpataru Properties is planning to raise INR 1,635 crore through bonds with a tenure of four years and nine days. The company is expected to offer a coupon rate of 8 per cent, payable quarterly. The structure will also include an undisclosed redemption premium intended to enhance the effective yield for investors.
The planned issuance marks Kalpataru’s return to the debt market after a gap of around two years. According to sources, GSS India Opportunities Alternate Investment Fund has already committed to subscribing nearly 50 per cent of the proposed issue, while the remaining amount is expected to be raised through investor bidding.
Shangrila Infracon India, meanwhile, is preparing its maiden bond issuance and plans to raise INR 950 crore through three-year notes. Sources said the company remains in discussions with potential investors and is expected to formally announce the transaction in the coming days.
Both issuances are likely to attract interest from private credit funds, which have increasingly expanded exposure to India’s real estate sector in search of relatively large and yield-generating transactions. Market participants indicated that private credit investors have remained active in structured real estate funding as developers continue to seek alternative financing channels.
The growing role of private credit in Indian real estate financing has accelerated over the past few years amid tighter banking norms and cautious lending practices by conventional financial institutions. Merchant bankers stated that banks have continued to remain selective in extending fresh credit to developers, particularly for non-priority and leveraged projects, leading many real estate firms to explore bond markets and private capital sources.
According to a recent report by EY, the real estate sector received the largest allocation from private credit funds in 2025, ahead of sectors such as healthcare and industrial products. Industry observers noted that residential and mixed-use developers with established execution records have emerged as key beneficiaries of the trend.
The proposed debt issuances also reflect broader activity in India’s real estate capital markets, where developers are increasingly using structured debt instruments, private placements and alternative investment funds to support project execution, refinance liabilities and maintain liquidity amid expansion plans across residential and infrastructure-linked developments.
Source - Reuters
5th Jun, 2025
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